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- (Topic 1)
Which one of the following statements regarding portfolio diversification is not correct?
Correct Answer:A
CORRECT TEXT - (Topic 2)
Identify and explain two ways for AMI to hedge its exchange rate risk. Essay
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.
Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.
Solution:
Either enter into a forward contact for the used Or enter into a money market hedge to get the receivable at the current spot rate and take the loan in used to be paid by the customer when they are due for their payments.
Does this meet the goal?
Correct Answer:A
- (Topic 1)
Plenary Inc specializes in overnight package delivery. Total packages delivered last year were 10 000.000. and this quantity is expected to remain unchanged in the coming year. Unit contribution margin is $4,50 and total fixed costs are S40.000,000. The firm's 300 delivery truck drivers are seeking a S10 000 raise in annual salary In addition to a current base salary of $45 000 per year, the drivers receive a commission of $0 50 per package delivered If the firm grants the $10,000 salary increase to each driver and seeks to maintain the same level of pre-tax operating profit what is the maximum amount of commission the firm can pay its drivers per package delivered?
Correct Answer:B
- (Topic 1)
It is possible to eliminate risk in a two-stock portfolio of common stocks if
Correct Answer:B
- (Topic 1)
A group of nations is considering me formation of a cartel associated with the manufacture and distribution of a product that they each export. Which one of the following outcomes would not be consistent with me formation of a carter?
Correct Answer:A